History repeating as Rhodri risks sending Euro millions back

12.00.00am UTC (GMT +0000) Thu 19th Jun 2008

Mike German believes "history is repeating itself" after Rhodri Morgan has admitted it will "take a miracle" for Wales to spend all its Objective One funding due to a lack of match funding.

Responding to questions from Welsh Liberal Democrat leader Mike German, about whether Wales would be able to spend the additional £40m available due to currency fluctuations, Mr Morgan said "it will be a miracle if we can achieve the whole thing."

Mike German served as minister for economic development in the Partnership Government which came about following the resignation of First Secretary Alun Michael. He said: "This is a clear case of history repeating when it comes to Objective One funding. At the start of the programme Alun Michael lost his job because he was unable to secure the match funding Wales needed to make the most of Objective One funding. Now, at the end of the programme, Rhodri Morgan is softening us up for sending the money back to Brussels - and one of the reasons seems to be the lack of match funding.

"Because the exchange rate between the Euro and the pound has changed, Wales stands to benefit from an extra £40m in European cash. But Ieuan Wyn Jones, the economic development minister, would have to provide match funding of £20-£30m. That would be a significant boost to the Welsh economy - but here we have the First Minister claiming it will take 'a miracle' to spend it.

"The government has talked a lot over the last four years about having a more strategic approach to European funding, but there's nothing strategic about sending the money back, while West Wales and the Valleys continue to be less prosperous than the rest of Europe.

"The EU has awarded Wales this money in recognition that our economy is lagging behind many of European neighbours. The government owes it to the people of Wales to put this money to work. The First Minister told committee that finding the extra match funding would be 'an overstretch on our budget'.

"It seems that there has been a strategic failure to plan for the end of the programme as great as that at the beginning. Sending the money back will be a damning indictment of this One Wales government."

Notes:

Mike German raised the questions during a meeting of the Assembly's European and External Affairs committee this morning.

Mike German served as Minister for Economic Development, with responsibility for European Funding in 2000-1.